Here’s what worries Exxon investors

By Claudia Assis

Exxon Mobil Corp.
/quotes/zigman/203975/quotes/nls/xomXOM per-share first-quarter earnings came above Wall Street expectations but that hasn’t prevented some kvetching. These slides show what has the potential to rob Exxon investors of some sleep.

Look closely at the chart and zero in the bigger slab of red. That’s how much Exxon’s upstream — ie, exploration and production — operations lost year-on-year, offset by higher profits for its chemicals unit and lower corporate and financing expenses. Exploration and production obviously is at the heart of Exxon’s operations, so this raised more than a few eyebrows. On the year, earnings increased $50 million. On the quarter, they fell $450 million.

Here’s the slide showing Exxon’s first-quarter drop in production. Analysts had expected the company to churn out 4.41 million barrels of oil equivalent a day, and it fell slightly short. It also fell short compared with the year-ago period.

This is the salve that Exxon applied at the conference call with analysts. The company sought to reiterate its good long-term prospects and its girth. Vice president David Rosenthal said the company is confident current development projects will deliver, ensuring “our ability to get those barrels to market.

“We’ve got a very large portfolio and in a lot of different areas,” he added.

When you are Exxon, that may not be enough to reassure shareholders. They are also fretting about the buyback, which was trimmed to $4 billion for a second-quarter from $5 billion. On the other hand, Exxon boosted its annual dividend 11% to 63 cents a share late Wednesday.

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